The classification of goods for customs duty purposes must be based on evidence and specific legal standards; the burden of proving misclassification rests on the revenue, not the importer.

Per Mr. Ajayan T.V.

Johnson Lifts Pvt. Ltd., the Appellant herein has preferred this appeal against the Order in Original No.101809/2023 dated 12.05.2023 passed by the Commissioner of Customs, Chennai II.

2. The brief facts are that the Appellant had imported goods classifying them as parts of Lifts / Escalators under CTH 8431. Pursuant to an audit conducted, the Department issued a Show Cause Notice dated 27.06.2022 (SCN) under Section 28 (4) of the Customs Act 1962 invoking the extended period of limitation, alleging that the goods Angle Steel, Belt, Bolt and Nut, Brush, Chain, Clamp, Clip, Door Lock, Fish Plate, Hinge, Push Button, Rope, Springs, Springs Pin, Switch, Washer and Buzzer, imported through various ports, which were required to be classified under the respective CTH, have been mis-classified under CTH 8431 by the Appellant. The notice proposed rejection of the classification adopted by the Appellant and reclassification under the respective headings, consequent to which differential duty of Rs.1,24,08,419/- was demanded along with appropriate interest. Further, alleging liability to confiscation of the imported goods under Section 111 (m) and Section 111 (o) of the , proposals for imposition of penalties under Section 112 (a) , 114 A and 114 AA of the were also made in the said notice.

3. After due process of law, the Adjudicating Authority rejected the classification adopted by the importer and reclassified the imported goods under the Customs Tariff items as mentioned below:

The Order confirmed a demand of differential duty of Rs.1,23,45,249/- after dropping an amount of Rs.63,170/- which was demanded in excess due to error in calculation and duplication of entries. An amount of Rs.54,046/- as well as an interest amount of Rs.31,365/-paid was appropriated towards the said differential duty liability and interest confirmed. After noting that the goods are already cleared, the order, finding the goods liable to confiscation under section 111(m), imposed a redemption fine of Rupees Three crores under the provisions of Section 125 of the Customs Act , 1962 in lieu of confiscation as well as a penalty of Rs.1,23,45,249/- along with interest thereon under Section 114A of the and a penalty of Rupees Twelve lakhs under Section 114 AA of the , 1962. Aggrieved by the Order in Original and having preferred this appeal, the Appellant is now before this Tribunal.

4. Shri Joseph Prabhakar, Ld. Advocate appearing for the Appellant submitted that the Appellant is engaged in the business of turnkey projects of installation and commissioning of lifts and escalators. The Appellant imports the parts required to install the lifts/escalators according to the purchase orders received by them. In some cases, the Appellant places back to back orders with the overseas vendors. Since the parts are manufactured specifically for lifts and escalators, and can not be used elsewhere, at the time of import, the Appellant has filed the Bills of Entry under CTH 8431. Ld. Counsel submits that the Appellant has been regularly importing these items under CTH 8431 since the year 2000 and there has never been any dispute.

5. It is the submission of Ld. Counsel that the entire goods imported by the Appellant were specifically manufactured for lifts / escalators. All the parts imported are unique and can be used only in the erection and installation of lifts/escalators and are essential for the f